The Dynamics of Energy Poverty in China: Household Level Analysis and Mitigation Strategies

Abstract

Energy poverty poses a significant challenge in the context of stringent environmental policies, particularly in developing economies like China. This study investigates the impact of energy poverty at the household level from 2010 to 2022 using data from the China Family Panel Studies (CFPS). The analysis incorporates information from 49,373 households across 25 regional administrative divisions, excluding regions with insufficient representation. We measure energy poverty using two proxies: the proportion of household energy expenditure to total household income, and a threshold indicator where households spending more than 10% of their budget on energy are classified as energy poor. Covariates include family size, age, and education level of household heads, and regional characteristics (North–South division). Results reveal that households in northern China experience significantly higher energy poverty, exacerbated by stricter environmental policies and climatic conditions. Energy storage systems are emerging as a critical mitigating factor, reducing energy costs and smoothing consumption patterns. Policy implications suggest incentivizing affordable and accessible energy storage technologies to alleviate energy poverty while ensuring environmental sustainability.